OECD: Distributed ledger technologies are set to transform financial markets

Earlier this year, the OECD released a report titled The Tokenisation of Assets and Potential Implications for Financial Markets.

It provides a thorough overview of what tokenization is, the underlying technology and the benefits and risks that come with it. It expands on equity and debt tokenization and also explores the potential role of a tokenized central bank currency. Several case studies are available, including tokenization in equity markets, debt markets and securities lending, as well as real estate tokenization cases in Russia, USA and France.

The report highlights the following benefits derived from the adoption of Distributed Ledger Technology:

• Efficiency gains driven by automation and disintermediation; 
• Transparency; 
• Improved liquidity potential and tradability of assets with near-absent liquidity; 
• Faster and potentially more efficient clearing and settlement.

According to the OECD, “distributed ledger technologies are set to become a transformative feature of financial markets, both in financial products and in the underlying market infrastructure itself

The full report and a highlights summary are available for download here.